As unrest continues to spread throughout the Middle East, American officials must re-evaluate relations with longtime allies in the region. Perhaps the most important of these, Saudi Arabia, has taken military action in neighboring Bahrain this week, leading to tensions in the U.S.-Saudi relationship. To learn more about this perilous situation, read this article by WorldAffairs 2011 keynote speaker David Sanger, Chief Washington Correspondent for The New York Times.

Sanger will give an address titled, “Obama’s Dilemma: When Big Uprisings Hit Big Allies (and a few Adversaries)” at the conference this Saturday at 1:15 PM PST, which will be webcasted live. The conference webcast is free to watch. Find out more about the conference and the webcast here.

In their rush to gain an end of the year tax deal, elected leaders postponed hard choices. In the process, they denied the government the revenues it needs to either respond to unforeseen crises or deliver on promises made.

At the same time, wary corporate decision-makers reported that uncertainty over tax and fiscal policy had discouraged them from creating jobs or making R&D investments essential to prosperity.

As self- imposed constraints limit the agility of these two important sectors, a third—the non-profit sector—worries that the 2010 Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act may have a cascading effect, further impoverishing state and local governments, shifting the burden of providing social services from the public to the non-profit sector. Moreover, its leaders fear that the estate tax provisions may reduce incentives for wealthy individuals to make the no-strings-attached donations and bequests that free the sector from the constraints of politics and markets.

Our tax structure has long reflected the value we place on the nonprofit sector’s ability to take risks and try out new ideas without fear of political or market reprisals. Income and inheritance taxes have encouraged donations and bequests, as well as the creation of tax-exempt foundations. As a result, our nation has a diverse charitable sector comprised of grantees and grantors who are tackling issues at home and across the globe. Free from the need to garner votes or generate profits, they needn’t test the political winds before offering services to the most marginalized Americans. Their reach extends to the developing world, where they have created or supported “social enterprises” with for-profit business models for providing off-grid communities with renewable sources of energy. And, globally they have even entered into public-private partnerships to effect high policy, as Warren Buffett did in making his $50-million gift to the UN’s politically-hampered and resource-strapped International Atomic Energy Agency. That grant will help to create a “nuclear fuels bank” upon which states committed to nonproliferation can draw to meet their energy needs.

Whether the tax deal will limit the freedom of non-profits to achieve such salutary outcomes is a matter of intense debate. But, it is up to us to ask and answer that question before the law’s review in 2012. An election year is a particularly poor time for political risk-taking. Policy-makers will need to be armed with the facts, and buttressed by a clear and unswerving sense of the sector’s purpose.

First the data: The law extends several provisions that can affect charitable giving—and provides time to gather data on their effect. It extends Bush-era tax cuts at all income levels and continues favorable treatment of capital gains and dividends. It delays a requirement that high-income tax-payers reduce their itemized deductions, including for charitable gifts. It exempts older taxpayers from treating up to $100k gifted to charities from their IRAs as taxable income. But, what worries some nonprofits is the 35% cap it places on inheritance taxes, while exempting estates of $5m or less. Many analysts argue that these estate tax provisions will remove incentives for bequests as well as giving-while-living aimed at reducing the size of the taxable estate. Others contend that estate tax considerations play a negligible role in the decision to give, but can influence the size of the gifts made. They draw on the 2004 predictions of the Congressional Budget Office, which anticipated a drop off in the number and size of bequests. Indeed fewer dollars were donated in this way during the phase-out of the estate tax, from 2008-2009. But, that year’s economic contraction is likely to have had far greater effect. More time in an improved economic climate can yield more data on which policymakers can base future choices.

And, the purpose – As we undertake that analysis, it is essential that we come to a shared view of the reasons for charitable organizations, and their tax-exempt status, in the first place. Americans value nonprofits because they can take actions and generate ideas that may be unwelcome, unpopular, and unprofitable in the short run, but produce true societal benefit over time. In the process, they can help identify and tackle truly hard problems when others cannot. Among the hard problems nonprofits can help address is the need to get our country on a financially sustainable course. Nonprofits have already contributed by sounding the alarm, providing analysis and offering policy options.

The deficit dilemma has helped to highlight the hurdles political and business decision-makers face when it comes to calling for sacrifice. Elected officials must respond to caricatures of their views repeated in 24 hour news-cycles. Business leaders are required to produce shareholder value as measured in quarterly returns. The nonprofit sector may be the only one that can afford to ask tough questions, test novel solutions and build consensus from the ground up.

In considering our tax laws in 2012 our goals should be straight-forward: to regain our ability to solve problems as a nation. Preserving the nonprofit sector’s freedom to help tackle society’s next hard problem is an essential first step.

This week the European Union announced new sanctions against Iran. The sanctions are one part of the EU’s strategy to pressure Iran to resume negotiations on its nuclear program. The United Nations imposed a fourth round of sanctions on Iran last month, but the EU’s go farther, affecting the energy, transport and finance sectors. While American investment in Iran has decreased in recent years, the EU is Iran’s largest trading partner and the new sanctions could have a significant impact on many European economies.

The United States also imposed new sanctions on Iran this month, with the goals of halting financing for the Islamic Revolutionary Guards Corps that oversees missile and nuclear programs as well as curbing even further investment in Iran’s energy sector. They also target federal contractors that do business with Iran.

Learn more about the sanctions on Monday, August 2 when the Council hosts Jillian Burns, the Acting Director of the Iran Office of the State Department. She will discuss U.S. policy towards Iran, offering insight into the effectiveness of current sanctions and exploring Iran’s role in the region.

Only days after Russian President Dmitri Medvedev met in Washington with President Obama, the FBI accused 11 people of being Russian agents. The charges include money laundering, conspiracy and failing to register as agents of a foreign government, but do not include espionage. The FBI has been tracking the alleged spies since 2003, though many of the spies have been in the US since the 1990s.

The need for increased vigilance towards Russia’s spy program was brought up at Monday night’s Council program with Georgia’s Ambassador to the US, Batu Kutelia. He noted the weekend’s 11 arrests and said, “This same case happened in Georgia five or six years ago and at that time I was head of our foreign intelligence service and when we intercepted and arrested this, most of the world accused us, Georgia, of being too provocative towards Russia. But now it appears that the same activities are happening in a different part of the world and the intention of modernizing Russia is really good, but if they continue with business as usual, there could very different consequences for them as well.” To listen to the entire program with Ambassador Kutelia, please visit our online audio archive.

To learn more about Russia’s history of espionage the US, read this article from the New York Times. For more information about the relationship between Russia and the Caucasus, read this article from the current issue of Foreign Affairs.

“Insanity is doing the same thing over and over but expecting different results.” This famous quote from Albert Einstein is the best way of describing US foreign policy in the Middle East, according to author and journalist Stephen Kinzer. He believes that our approach to the Middle East is stuck in a Cold-War mentality and that the US must find a new set of partners in the region. Kinzer feels that when Americans can put aside their emotions, and look for countries that have similar long-term goals and societies, “we see that [Turkey and Iran] are the two countries that are our logical partners going forwards.”

To listen to the entirety of Stephen Kinzer’s June 18 program at the World Affairs Council—‘Reset: Turkey, Iran and America’s Future’—please visit our online audio archive.

The World Affairs Council was honored to host the President of Kosovo, Dr. Fatmir Sejdiu, on January 12. As the leader of the world’s youngest country, Dr. Sejdiu is optimistic about Kosovo’s future, but also recognizes the many challenges it faces. Regionally, Kosovo is challenged by Serbia’s continued refusal to acknowledge the state’s independence. Globally, Kosovo has only been recognized by 65 of the 192 sovereign UN member states, including the United States and 22 of the 27 European Union member states; notably absent from this group are Spain, Russia and China. As Kosovo’s second anniversary approaches, the president ended on a positive note: “We can’t forget, but we can move forward!”

To listen to the entire program with President Sejdiu, please visit our online archive. To read about the latest country to recognize Kosovo’s independence, Mauritania, click here, and to learn more about the Serbian position, read the recent New York Times interview with Serbia’s Minister of Foreign Affairs.